Brief Summary

Criminal Law — Sentence — Appeal against sentence — Appellant convicted of fraud exceeding R10 million and sentenced to ten years’ imprisonment — High Court’s refusal to grant leave to appeal against sentence challenged — Whether reasonable prospects of success established for altering the sentence on appeal — Appeal dismissed as no material misdirection found in trial court’s sentencing discretion.

Comprehensive Summary

Summary of Judgment

Introduction

The proceedings were an appeal to the Supreme Court of Appeal against an order of the Gauteng Division of the High Court, Pretoria, which had refused a petition for leave to appeal against sentence. The appeal before the Supreme Court of Appeal was brought with special leave.

The appellant was Treasure Moremi, who had been convicted of fraud together with her co-accused, Denmag Trading (Pty) Ltd. The respondent was the State. The fraud related to claims made under the Temporary Employee/Employer Relief Scheme (TERS) administered by the Department of Labour during the Covid-19 lockdown.

The procedural history was that the appellant and Denmag were convicted in the Specialised Commercial Crimes Court, Regional Division of Gauteng, Pretoria, after they pleaded guilty. The appellant was sentenced to ten years’ imprisonment. Her application for leave to appeal against sentence was refused by the trial court, whereafter she petitioned the High Court in terms of section 309C of the Criminal Procedure Act 51 of 1977, which petition was also refused. The present appeal concerned whether the High Court was correct to refuse leave, which required the Supreme Court of Appeal to decide whether there were reasonable prospects of success in an appeal against the sentence.

The general subject-matter of the dispute was sentencing for a large-scale fraud (exceeding R10 million) committed through false TERS claims, and whether a non-custodial sentence (including correctional supervision) was reasonably arguable on appeal in light of the minimum-sentence framework and the seriousness of the offence.

Material Facts

The court proceeded from the factual basis established by the guilty pleas and the material placed before the sentencing court. It was common cause that the appellant and her husband were directors and shareholders of Denmag and that, within the business, the appellant was responsible for finances and general management while her husband focused on contracts and advertisements. Denmag had 22 employees at the relevant time, and its operations were temporarily suspended for approximately four months during the Covid-19 lockdown in 2020.

Between April and June 2020, the appellant submitted multiple TERS claims to the Department of Labour, representing that Denmag had 533 employees and claiming a total of R10 619 677.89. These claims were supported not only by the particulars of Denmag’s actual employees but also by the personal particulars of former employees and individuals who had submitted curricula vitae but had never been employed. The Department paid Denmag the amounts claimed in respect of these “ghost” employees.

The funds paid out were used to purchase assets for Denmag, including machinery, vehicles, containers, and building materials. Some funds were also passed to the appellant and her husband for the personal acquisition of immovable property. After these events, the appellant and her husband approached the Department of Labour and admitted to having been overpaid. They characterised the overpayment as a mistake or error, and an agreement was concluded for repayment. A sum of R3 545 474.71 was repaid, leaving a substantial balance outstanding.

The court distinguished between the appellant’s later portrayal of the claims as erroneous and the nature of the conduct established by the admitted facts. Although the appellant initially indicated during a bail process that she would plead not guilty, at trial she and Denmag pleaded guilty and admitted that they knew the representations resulting in the pay-outs constituted a criminal offence. In evaluating sentence-related material, the court treated the appellant’s suggestion that the claims were the result of mistake as inconsistent with the repeated and detailed nature of the claims and the use of real persons’ details.

For sentencing purposes, the trial court accepted the appellant’s personal circumstances as placed before it, including her age, marital status, three minor children, educational qualifications, employment income, absence of previous convictions, and the availability of family support. It also had before it a psycho-social pre-sentence report, a correctional supervision report, and affidavits with bank statements relevant to the offending period.

Legal Issues

The central legal question was whether the High Court erred in refusing leave to appeal against sentence under the petition procedure, which turned on whether the appellant established reasonable prospects of success that an appeal court would interfere with the sentence of ten years’ imprisonment.

This enquiry was primarily an application of established sentencing and appellate principles to the facts. It required assessment of whether the trial court committed a material misdirection, or whether the sentence was so disproportionate as to induce a sense of shock, and, within the minimum-sentence context, whether there were reasonable prospects that a different court would impose a materially different sentence, including a non-custodial sentence such as correctional supervision.

The dispute therefore concerned the application of law to fact within a discretionary sentencing domain, rather than the resolution of contested factual guilt. It also involved evaluative judgment about the weight properly attached to mitigation, remorse, the interests of minor children, the seriousness of the offence, and the policy objectives underpinning the minimum-sentence regime.

Court’s Reasoning

The Supreme Court of Appeal approached the matter on the basis that the appeal was not a full sentencing appeal. The immediate question was whether there was a sound rational basis to conclude that there were reasonable prospects that an appeal court would interfere with the sentence, such that leave to appeal should have been granted. The court reaffirmed that the sentencing discretion of the trial court is not lightly disturbed on appeal, and interference ordinarily occurs only where there has been a material misdirection or where the sentence is startlingly inappropriate.

In assessing whether any material misdirection occurred, the court noted a single error identified by the State: the trial court had treated a confiscation order (granted later) as a substantial and compelling circumstance. Relying on authority that confiscation and sentence must be treated separately, the Supreme Court of Appeal held that this was indeed an error but concluded that it was immaterial because it operated to the appellant’s benefit and did not prejudice her. Beyond that, the court held that the trial court correctly directed itself to the objectives of punishment and properly applied the triad of sentencing considerations.

A substantial focus of the appellant’s argument concerned the trial court’s alleged failure to give due regard to the psycho-social pre-sentence report and the correctional supervision report. The Supreme Court of Appeal rejected this criticism, holding that the trial court had engaged with the reports in detail and that the author of the pre-sentence report testified, permitting interrogation of her opinions. The court explained why several opinions in the psycho-social report were regarded as weakly supported when tested against objective information. It highlighted, in particular, bank-statement evidence showing continuing cash inflows into Denmag during the relevant period, which undermined the narrative that the appellant acted in panic due to financial distress. It also considered the nature of the conduct as repeated and carefully executed, which the court held was inconsistent with an isolated lapse “out of character”.

The court further reasoned that the report’s attempt to minimise the appellant’s personal benefit was not sustained, because the appellant, as a shareholder, benefited indirectly from Denmag’s enrichment, and the evidence supported that funds were used for personal property acquisition. The court also treated the claim that the overpayment was due to mistake as inconsistent with the pattern of repeated false claims, and as indicative that the appellant did not fully “come clean” at an earlier stage in a manner consistent with genuine remorse.

On the interests of the appellant’s minor children, the court accepted that incarceration would have adverse effects but held that the circumstances did not show that imprisonment would inappropriately compromise their interests. The evidence demonstrated that the appellant was not the sole caregiver and that the children’s father was involved and capable of providing care, with further family support available. The court applied authority emphasising that, while children’s interests are relevant, they cannot override the duty to impose appropriate punishment where imprisonment is indicated. It distinguished the appellant’s situation from the position of a single parent solely responsible for minor children.

A decisive aspect of the court’s reasoning concerned the minimum-sentence framework. Because the fraud exceeded R500 000, section 51(2)(a) read with Part II of Schedule 2 of the Criminal Law Amendment Act 105 of 1997 applied, making 15 years’ imprisonment the prescribed minimum sentence for a first offender absent substantial and compelling circumstances. The court stressed that, under this regime, sentencing is not “business as usual”: the prescribed sentence is the starting point, and departure requires truly convincing justification rather than flimsy or speculative grounds. It held that the trial court approached this enquiry holistically, acknowledged the constrained discretion, found substantial and compelling circumstances, and already departed significantly from the minimum by imposing 10 years’ imprisonment.

When assessing the appellant’s contention that a non-custodial sentence was appropriate, the court reiterated that suitability for correctional supervision does not mean it must be imposed. The trial court had considered whether non-custodial sentencing would suffice and concluded that a custodial sentence was required. The Supreme Court of Appeal found no fault in that conclusion, emphasising the seriousness, scale, and sustained nature of the fraud, including repeated claims requiring reflection and persistence over months. Although the appellant was technically a first offender, the court held that the repeated conduct substantially reduced the mitigating force of that status.

In evaluating comparative arguments drawn from authorities about imprisonment as a last resort and utilitarian approaches to punishment, the court regarded the foreign cases referred to as of limited assistance in the present context and emphasised that the sentence must be determined on the facts of the case. It aligned the trial court’s approach with established jurisprudence stressing that “white-collar” crime can warrant rigorous custodial punishment, particularly where substantial loss is caused and the conduct is motivated by self-enrichment. The court underscored the particular aggravation arising from the misappropriation of funds intended to relieve hardship during a national crisis, and the need for effective deterrent punishment given the societal harm of corruption and fraud.

On this basis, the Supreme Court of Appeal concluded that the appellant had not shown reasonable prospects that an appeal court would interfere with the trial court’s sentencing discretion, and therefore the High Court did not err in refusing leave to appeal.

Outcome and Relief

The Supreme Court of Appeal dismissed the appeal against the High Court’s refusal of leave to appeal. The consequence was that the appellant did not obtain leave to appeal her sentence of ten years’ imprisonment, and the refusal of the petition stood.

No separate costs order is reflected in the judgment, and the operative order was that the appeal is dismissed.

Cases Cited

S v Khoasasa [2002] ZASCA 113; 2003 (1) SACR 123 (SCA); [2002] 4 All SA 635 (SCA).

De Almeida v S [2019] ZASCA 84; 2019 JDR 0987 (SCA).

Smith v S 2012 (1) SACR 567 (SCA).

S v Zinn 1969 (2) SA 537 (A).

S v Rabie 1975 (4) SA 855 (A).

National Director of Public Prosecutions v Gardener and Another 2011 (1) SACR 612 (SCA); 2011 (4) SA 102.

S v EB 2010 (2) SACR 524 (SCA).

S v M [2007] ZACC 18; 2008 (3) SA 232 (CC); 2007 (12) BCLR 1312 (CC); 2007 (2) SACR 539 (CC).

S v PB 2013 (2) SACR 533 (SCA).

S v Malgas 2001 (1) SACR 469 (SCA).

S v Van Niekerk 1993 (1) SACR 482 (NC).

S v Scheepers 1977 (2) SA 154 (A).

S v Ngwenya 2008 JDR 1149 (T).

S v Gorogodo 1988 (2) ZLR 378.

S v Ngombe HH 504/87.

S v Teburo HH 517/87.

Shepard v S [2018] ZAKZPHC 70.

Manyaka v S [2022] ZASCA 21; 2022 (1) SACR 447 (SCA).

Nel v State [2023] ZASCA 89.

S v Sadler 2000 (1) SACR 331 (SCA).

Legislation Cited

Criminal Procedure Act 51 of 1977, including section 309C, section 236, section 276(1)(h), and section 297.

Criminal Law Amendment Act 105 of 1997, including section 51(2)(a) read with Part II of Schedule 2.

Rules of Court Cited

No rules of court were cited in the judgment.

Held

The Supreme Court of Appeal held that the appellant failed to establish a sound, rational basis showing reasonable prospects of success on appeal against sentence. It held that the trial court committed no material misdirection affecting the sentence and that the sentence of ten years’ imprisonment, already a substantial deviation from the prescribed minimum of fifteen years, did not present a reasonable prospect of being altered on appeal. Accordingly, the High Court’s refusal of leave to appeal was upheld, and the appeal was dismissed.

LEGAL PRINCIPLES

The test on an appeal concerning refusal of leave to appeal is whether there is a reasonable prospect of success, which requires a sound, rational basis for concluding that the envisaged appeal would succeed.

An appellate court does not lightly interfere with a trial court’s sentencing discretion. Interference is generally warranted only where there has been a material misdirection or where the sentence is so disproportionate that it induces a sense of shock.

Under the minimum-sentence regime created by the Criminal Law Amendment Act 105 of 1997, the prescribed minimum sentence is the starting point. A court may depart from it only where substantial and compelling circumstances exist, and such circumstances must be genuinely weighty rather than speculative. The regime signals that sentencing is not “business as usual” and shifts emphasis towards the objective gravity of the offence and the need for effective sanctions.

Confiscation orders and sentence are distinct and must be treated separately in principle; an error conflating them may constitute misdirection, but it will not necessarily justify interference if it is immaterial and non-prejudicial.

The interests of minor children are relevant in sentencing, but they do not automatically displace the appropriateness of imprisonment where a custodial sentence is otherwise indicated, particularly where alternative caregivers and family support are available.

Suitability for correctional supervision does not entail entitlement to such a sentence. Whether correctional supervision is appropriate remains for the sentencing court to decide in light of the seriousness of the offence and the offender’s blameworthiness, especially in serious and sustained fraud committed for self-enrichment.

Moremi Treasure v S (881/2024) [2025] ZASCA 137 (25 September 2025)